In his latest analysis and commentary, stock market expert Jai Bala of cashthechaos.com shared his views and outlook on the markets.
“The markets are at an important juncture based on time as well as price and I predicted these levels around September last year. The markets are at a very critical juncture. An important factor is that the US markets are positioned in an excessive manner. Going back to 2003, this signal has failed only once and the next three months are likely to produce very poor results somewhere between 4 percent and 17 percent,” he said.
“If Indian market takes out 12,400-12,450, we need to revise the view that we have that markets will start correcting from these levels. So the markets are at a very important crossroads. It needs to act as per expectation at this juncture. If it does manage to hold on, the bulls have played the hands very well,” he added.
“Fast-moving consumer goods sector is rightly poised. One can go long on Britannia Industries. A nice correction has been done from the high of about Rs 3,500-3,600 to where it is now and looks like it could hold Rs 2,900 and once again there is going to be record highs. Another trade is Bharat Petroleum Corporation Ltd (BPCL). I expected it to go somewhere close to Rs 590 and then correct but it pulled back much earlier. Place a stop below Rs 440 and expect Rs 490 as the target for BPCL,” Bala said.
In terms of Reliance Industries Ltd (RIL), he said, “RIL is a bit dicey. I am a bit ambivalent as to what stand I need to take on the stock. If it breaks down below Rs 1,422, that will be a confirmation of a long reversal but until that point, you can be on the side of caution and stay bullish on the stock but limit your exposure, lower your allocation. Allocate lower and use this rally – if you are an investor – to get out.”
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